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Climate Change: The Move to Action
(AOSS 480 // NRE 480)
Richard B. Rood
734-647-3530
2525 Space Research Building (North Campus)
[email protected]
http://aoss.engin.umich.edu/people/rbrood
Winter 2010
April 1, 2010
Class News
• Ctools site: AOSS 480 001 W10
• On Line: 2008 Class
– Reference list from course
• Rood Blog Data Base
Projects
• Final presentation discussion;
– April 20 last day of class
• Summary lecture discussion
– How to talk science?
– Climate intertwined with everything?
• After class meetings
–
–
–
–
3/30: Transportation
4/1: Efficiency, New York Utility
4/6: Near-term solutions
4/8: Michigan’s response
Events
• Arun Agrawal
Driver of tradeoffs and synergies between
livelihoods and carbon storage in forest
commons
– April 1, 2010
– Room 1024 Dana
– Time: 4:00 - 5:00 (There will be refreshments)
Events
• Jim Hansen
Global Climate Change What Must We Do Now?
– April 6, 2010
– Blau Auditorium, Ross School of Business,
– Time: 4:00 - 5:30, Reception following
News of Climate Interest
• New Federal Automobile Mileage
Standards
• Off-shore drilling and national security
• Opinion piece on Obama and Energy (and
Climate?)
Readings on Local Servers
• Assigned Readings
– Dembach: Climate Change Law: An
Introduction
• Very important Reading
– Farber: Legal Status of Climate Models
From Last Time
• Introduced a set of “big” issues
–
–
–
–
–
–
Energy summary
Atmospheric stabilization
Role of efficiency
Divide between oil consumers and oil producers
Divide between rich and poor
Motivation to respond
• Policy response
• Scientific uncertainty and policy
• Policy Catalysts
What is short-term and long-term?
Pose that time scales for addressing climate
change as a society are best defined by human
dimensions. Length of infrastructure investment,
accumulation of wealth over a lifetime, ...
LONG
SHORT
Election
time scales
ENERGY SECURITY
CLIMATE CHANGE
ECONOMY
0 years
25 years
There are short-term issues
important to climate change.
50 years
75 years
100 years
We arrive at levels of granularity
WEALTH
Need to introduce spatial scales as well
Sandvik: Wealth and Climate Change
LOCAL
TEMPORAL
NEAR-TERM
LONG-TERM
GLOBAL
SPATIAL
Small scales inform large scales.
Large scales inform small scales.
The Official Policy is:
• United Nations Framework Convention on
Climate Change
– Framework Convention on Climate Change
What is COP?
• COP is the Conference of Parties
– Parties are those countries who have signed
the United Nations Framework Convention on
Climate Change. There are 192 signatories.
• Essential Background UNFCCC
Michigan Observer Status
• Framework Convention Parties and
Observers
– Parties are signatories of Framework
Convention
– Observers are invited to the meeting for
participation, transparency, and accountability
• United Nations Representatives
• Intergovernmental Organizations
• Non-governmental Organizations
– Virtual Participation
Framework Convention on Climate Change
(US in part of this.)
• UN Framework Convention on Climate Change
(1992, non-binding, voluntary, 192 signers)
– Reduce CO2 Emissions in 2000 to 1990 levels
– Inventories of greenhouse gas emissions
– Mitigate Climate Change
• Mid-1990’s
– No reduction in emissions
– Evidence of warming and impacts
Framework Convention on Climate Change
Development of International Approach to Climate Change
1988
1992
1995
1997
2001
IPCC
established
Framework
Convention
(UNFCCC)
Kyoto
Protocol
Scientific
assessment
Non-binding
aim
Binding
emissions
target
2007
?????
Dangerous climate change?
• What is dangerous?
Stern Report
• Draws on recent science which points to
‘significant risks of temperature increases above
5°C under business-as-usual by the early part of
the next century’ — other studies typically have
focused on increases of 2–3°C.
• Treats aversion to risk explicitly.
• Adopts low pure time discount rates to give
future generations equal weight.
• Takes account of the disproportionate impacts
on poor regions.
Dangerous climate change?
Stern, 2006
Stern Report
• Considered a radical revision of climate change
economics.
– If we don’t act now it will cost between 5% and 20%
of gross domestic product (an aggregate measure of
economy.)
• Stands in contrast to many studies that usually
come to numbers of closer to 1%
– The idea that initiation of a policy with a slow growth
rate will have little impact on the economy or
environment in the beginning, but will ultimately
become important when the nature of expenditures is
more clear.
Some carry away messages
• Determine what is a tolerable ceiling for carbon
dioxide.
- Gives cap for a cap and trade system.
- Tolerable ceilings have been posed as between 450
and 550 ppm.
- Ice sheet melting and sea level?
- Oceanic circulation / The Gulf Stream?
- Ocean acidification?
- Determine a tolerable measure of increased
temperature
- Copenhagen Accord (2009)  2o C
Dangerous climate change?
Stern, 2006
Back to Stabilization
Basic constraint on carbon policy
350.org
Basic constraint on carbon policy
Stabilizing concentrations
Means Action Now …
Ceiling (ppmv)
350
450
550
650
750
Start Date
Too
late
2007
2013
2018
2023
Max Emission
6.0
8.0
9.7
11.4
12.5
2005
2011
2033
2049
2062
Max Year
1950 – 1.8 tons // 1990 – 5.8 tons // 2000 – 6.5 tons
Thanks to Rosina Bierbaum
1992 Convention Commitments
• All Parties agree to:
4.1.b. Mitigate emissions and enhance sinks
4.1.c. Promote technology development and
transfer
4.1.e. Cooperate on research and observation
• Developed Countries’ aim to return emissions to
1990 levels by the end of the century
Assessment
• Mid-1990’s
– No reduction in emissions
– Evidence of warming and impacts
• 2001
– No reduction in emissions
– Evidence of warming and impacts
• 2007
– No reduction in emissions
– Evidence of warming and impacts
Increase of Atmospheric Carbon Dioxide (CO2)
“This generation
has altered the
composition of the
atmosphere on a
global scale
through…a steady
increase in carbon
dioxide from the
burning of fossil
fuels.”
--Lyndon Johnson
Special Message
to Congress,
1965
Data and more information
Kyoto Protocol followed 1995 assessments
• Why is the Kyoto Protocol still relevant?
Kyoto Protocol
• Kyoto Protocol (December, 1997, binding
limits on or reduction of emissions)
– Must be signed (155 signers (?186)) and
ratified
• At least 55 countries
• That represent 55 % or more of emissions
– Open for signatures on March 16, 1998
– Went into effect on February 16, 2005
• After Russia signed and ratified
Kyoto Protocol Requirements
• Developed nations reduce their emissions 5.2% below 1990
emissions
– Reduction (increases) vary across countries
– Relaxed a little over the years to attract signers
– (Treaty: U.S. 7% reduction: Actual: 12% higher in 2004, 30% by 2012)
• Addresses “six” greenhouse gases (CO2, Methane CH4, Nitrous
Oxide N2O, hydrofluorocarbons, perfluorocarbons, sulphur
hexafluoride)
• Commitment period 2008-2012
• Set of other activities
–
–
–
–
Improve “local emission factors”
Inventories of emissions and sinks
Mitigation and adaptation plans
Environmentally sound technology diffusion to developing nations
Kyoto Protocol Issues
• Amount and distribution for limits and
reductions
• What greenhouse gases to include
• Developing countries in or out of emission
requirements
• Trading, market-based mechanisms
• Role of removing greenhouse gases
Kyoto Protocol: Important Add ons
• Market-based mechanisms
– Emissions trading
– Joint implementation
– Clean development mechanisms
• “Common but differentiated
responsibilities”
Thanks to Rosina Bierbaum
Flexibility in Achieving Targets
• “What” flexibility
– Targets apply to CO2-equivalent emissions
of basket of six GHGs
– Can use carbon sinks (e.g. forests) as
offsets
• “When” flexibility
– Five-year commitment period
– Banking
• “Where” flexibility
– Market mechanisms: ET, JI, CDM
Thanks to Rosina Bierbaum
Kyoto Mechanisms:
• Bubbles (Art. 4)
– Any group of Annex I countries may pool
emissions targets
German Target
Greek
Target
Thanks to Rosina Bierbaum
Kyoto Mechanisms:
• Emissions trading (Art. 17)
– Developed countries and firms can
trade parts of their “assigned amounts”
of emissions
– Successfully used in US in sulfur dioxide
program
US
AAU
Norway
Thanks to Rosina Bierbaum
Kyoto Mechanisms:
• Joint implementation (JI) (Art. 6)
– One Annex I country undertakes a project
in another country to reduce emissions or
enhance sinks
– The project generates an “emission
reduction unit,” which can be transferred
– ERUs subtracted from transferor’s
assigned amount and added to
transferee’s assigned amount
Thanks to Rosina Bierbaum
Kyoto Mechanisms:
• Joint Implementation (Art. 6)
US
ERU
Norway
Thanks to Rosina Bierbaum
Kyoto Mechanisms:
• Clean Development Mechanism (Art.
12)
– Annex I party can undertake mitigation project
in developing country
– Win-win approaches
• Developing countries get climate-friendly technology
• Projects generate “certified emission reductions”
(CERs), which developed countries can use to meet
emission targets
US
CER
India
Thanks to Rosina Bierbaum
Kyoto Protocol:
Issues with Market-based Mechanisms
• Trading with countries who do not have
emission limits / non-ratifying countries
• Integrity in the trading market
– “false” credits
– Reporting
– Measurements
– Verifying
“Flaws” in Kyoto Protocol
• Participation of Developing Countries
– Large populations, large projected growth
• Participation of the United States
– 25 % of greenhouse gas emissions
• Other “flaws”
– Does not go far enough: Emission goals don’t
adequately mitigate dangerous climate
change
– 2008-2012 commitment period – then what?
Elements of “U.S. Position”
• Will not be ratified unless developing countries
are included in emission limits
• Continuing concerns
– Impact on economic growth and gross national
product
• CO2, currently, directly related to enterprise, economy …
– Robustness of scientific justification and observations
– Winners outweigh losers
• Policy defines winners and losers in a different way.
Issues of implementation
• Rules that govern compliance
• The rules of development and transfer of
cleaner, low emission, technologies
• The role of carbon sinks: trees, removal
technology, ….
• The reward/punishment for those who take
the initiative to address their emissions
unilaterally
Constituencies in the community
• “G-77” and China: ~130 developing countries,
work by consensus (generally represent The
Africa Group)
– Economic development and emission limits
– Sell their potential carbon credits for profit
• The Alliance of Small Island States (AOSIS)
– Tightest control on global emissions
• Organization of Petroleum Export Countries
(OPEC)
– Protection of their economic well being
Constituencies in the community
• European Union (EU)
– Coordinated position as environmental leader with
very ambitious emission reduction goals
• Japan, U.S., Switzerland, Canada, Australia,
Norway, New Zealand (JUSSCANNZ)
– Non-EU developed countries
– Cost of tackling the climate problem
• U.S., Canada, Australia: Low-efficiency energy use
• Japan, Switzerland, Norway, New Zealand: High-efficiency
energy use
Constituencies in the community
• Environmental Non-Governmental Organizations (ENGO)
–
–
–
–
Accept climate change science
Differ on acceptance of market-based mechanisms
Differ on role of businesses in tackling climate problem
Differ on role of geo-engineering
• Business and Industry Non-Governmental Organizations (BINGO)
– “Green” companies: Accept science and see business advantage or
necessity
– Middle ground: Accept science and cautious approach to mitigation
– “Gray” companies: Mostly U.S. fossil-fuel based industries: Question
science and impact, Cost of mitigation outweighs benefits
• Global Climate Coalition
• Climate Council
– Relationship with OPEC?
Beyond 2012
• Pew: International Climate Efforts Beyond
2012: Report of the Climate Dialogue at
Pocantico
– This is a report published by Pew of a
collection of experts on climate change
– It is very soft in its recommendations
• Like keep the international community together
• Identification of what is important in any viable
treaty
• Important problem, keep international attention
Beyond 2012
• Conference of Parties, Copenhagen 2009
• Copenhagen Accord
Where we sit at a national level
SEC. 16__. SENSE OF THE SENATE ON CLIMATE CHANGE. (2005)
(a) Findings.—Congress finds that—
1) greenhouse gases accumulating in the atmosphere are causing average
temperatures to rise at a rate outside the range of natural variability and are
posing a substantial risk of rising sea-levels, altered patterns of atmospheric
and oceanic circulation, and increased frequency and severity of floods and
droughts;
2) there is a growing scientific consensus that human activity is a substantial
cause of greenhouse gas accumulation in the atmosphere; and
3) mandatory steps will be required to slow or stop the growth of greenhouse
gas emissions into the atmosphere.
(b) Sense of the Senate.—It is the sense of the Senate that Congress should
enact a comprehensive and effective national program of mandatory,
market-based limits and incentives on emissions of greenhouse gases that
slow, stop, and reverse the growth of such emissions at a rate and in a
manner that—
1) will not significantly harm the United States economy; and
2) will encourage comparable action by other nations that are major trading
partners and key contributors to global emissions.
Scales: Time scale and “spatial” scale
GLOBAL CONSEQUENCES
LOCAL POLICY
(ADAPTATION)
SURFACE WARMING
GLOBAL POLICY
(MITIGATION)
GREEN HOUSE GAS INCREASE
Scale
• What is the best scale to measure vulnerability
and adaptive capacity?
– National:
• inform states on needed policy response; allow for better
decision making; allows for comparison of differential
vulnerability
– Regional
• Impacts are likely not to be defined by national borders
– Local
• Ground truth
• Allows for the understanding of the local factors that mediate
sensitivity and resilience
Thanks to Maria Carmen Lemos
Regional based Initiatives
• Changing very rapidly
Scales of Policy: U.S.
–Pew: State-based Initiatives (Update, 2007)
Basic constraint on carbon policy
1990 by 2020
Motivations for State Activity
• Economics
– States (and cities) are very aggressive at
promoting policy that they perceive as offering
economic advantage.
– Branding: To attract, for instance, the “creative
class”
• Belief and Culture
– Reflection of political constituencies
States can be viewed as:
(from Rabe (2006)) What has changed?
• Hostile to climate change policy
– Michigan (Auto industry, manufacturing)
– Colorado (coal and energy)
• Stealth interest?
– Texas (aggressive renewable portfolio)
– Nebraska (sequestration site)
• Out in front
– California (Water, water, water?)
– Northeast alliance
Policy: Regional and State and Local
• California Climate Change
• Regional Greenhouse Gas Initiative
• United Conference of Mayors
– U.S. Mayors: Climate Protection Agreement
• Map of US Mayors Climate Protection Agreement
• Cool Cities
Policy: Regional and State and Local
• Local Governments for Sustainability
– International Council for Local Environmental
Initiatives (ICLEI)
– ICLEI’s CO2 Reduction / Climate
• National Governors Association (NGA)
– NGA Transportation and Land Use
– NGA Environmental Best Practices
Brief return to Economics
The role of economics
• An assertion: When thinking about responding
to climate change we often first think of policy.
When we think about how to promote policy
where do our thoughts first land?
–
–
–
–
–
–
Conservation?
Public Health?
Water Resources?
Agriculture?
Economics?
…
From Class NOTES
• Economy – climate change impacts security, leads to
uncertainty in economic system, agriculture, energy
security
• Economy – when economy is bad climate change takes
back burner, energy security, national security, green
energy
• Leadership change
• Disasters – how good is the data, can we make
attribution, link to climate change
• Process takes longer – short term dominate, long term
• Framing as opportunity
• More … ?
The convergence to economics
• Conservation, public health, etc., touch
economy.
• Hence it is sensible to place attention on
the economics of climate change.
– Production, Distribution, and Consumption of
goods and services
– Macroeconomics is generally the summation
of the economy of states, regions, countries,
world.
• Measured broadly by gross domestic product
Where we sit at a national level
SEC. 16__. SENSE OF THE SENATE ON CLIMATE CHANGE. (2005)
(a) Findings.—Congress finds that—
1) greenhouse gases accumulating in the atmosphere are causing average
temperatures to rise at a rate outside the range of natural variability and are
posing a substantial risk of rising sea-levels, altered patterns of atmospheric
and oceanic circulation, and increased frequency and severity of floods and
droughts;
2) there is a growing scientific consensus that human activity is a substantial
cause of greenhouse gas accumulation in the atmosphere; and
3) mandatory steps will be required to slow or stop the growth of greenhouse
gas emissions into the atmosphere.
(b) Sense of the Senate.—It is the sense of the Senate that Congress should
enact a comprehensive and effective national program of mandatory,
market-based limits and incentives on emissions of greenhouse gases that
slow, stop, and reverse the growth of such emissions at a rate and in a
manner that—
1) will not significantly harm the United States economy; and
2) will encourage comparable action by other nations that are major trading
partners and key contributors to global emissions.
Economy
• We have built economy into our response
to climate change.
• States cite economic incentives as a
reason for developing policy.
Exponential Growth
Exponential Growth
300
Dollars
250
1 percent
200
2 percent
150
3 percent
100
5 percent
50
0
1
3
5
7
9
11
13
15
17
19
21
Years
U.S. views 2-3% Growth / year as a Stable Economy
Consider this gross domestic product (GDP)
Do you know the rule of 72?
Exponential Discount
Exponential Discount
120
Dollars
100
(1) percent
80
(2) percent
60
(3) percent
40
(5) percent
20
0
1
3
5
7
9
11
13
15
17
19
21
Years
This is how we discount the value of investments into the future.
Exponential Discount
Exponential Discount
120
Dollars
100
(1) percent
80
(2) percent
60
(3) percent
40
(5) percent
20
0
1
3
5
7
9
11
13
15
17
19
21
Years
This is how we discount the value of investments into the future.
How to value future return on investment versus near-term focus on investment.
Exponential Discount
Exponential Growth
300
250
Dollars
Exponential Discount
120
Dollars
100
80
60
40
2 percent
150
3 percent
100
(1) percent
50
(2) percent
0
(3) percent
1 percent
200
5 percent
1
3
5
(5) percent
20
7
9
11
Years
0
1
3
5
7
9
11
13
15
17
19
21
Years
Economic growth versus discount
In general. must also account for inflation or deflation
13
15
17
19
21
Exponential Discount
Exponential Growth
300
250
Dollars
Exponential Discount
120
Dollars
100
80
60
40
20
3 percent
100
50
(2) percent
0
(5) percent
2 percent
150
(1) percent
(3) percent
1 percent
200
5 percent
1
3
5
7
9
11
13
15
17
19
21
Years
0
1
3
5
7
9
11
13
15
17
19
21
Years
Real growth of wealth must address the loss of wealth through inflation, taxes, discounting.
Global economic analysis
– Stern Review: Primary Web Page
– Stern Report: Executive Summary
– Nordhaus: Criticism of Stern Report
– Tol and Yohe: Deconstruction of Stern Report
Stern Report
• Draws on recent science which points to
‘significant risks of temperature increases above
5°C under business-as-usual by the early part of
the next century’ — other studies typically have
focused on increases of 2–3°C.
• Treats aversion to risk explicitly.
• Adopts low pure time discount rates to give
future generations equal weight.
• Takes account of the disproportionate impacts
on poor regions.
Dangerous climate change?
Stern, 2006
Stern Report
• Considered a radical revision of climate change
economics.
– If we don’t act now it will cost between 5% and 20%
of gross domestic product (an aggregate measure of
economy.)
• Stands in contrast to many studies that usually
come to numbers of closer to 1%
– The idea that initiation of a policy with a slow growth
rate will have little impact on the economy or
environment in the beginning, but will ultimately
become important when the nature of expenditures is
more clear.
Stern Report included very small discount rate.
Exponential Discount
120
Dollars
100
(1) percent
80
(2) percent
60
(3) percent
40
(5) percent
20
0
1
3
5
7
9
11
13
15
17
19
21
Years
The discount rate of Stern Report is very small.
(Represents high valuation of ethical issues. Assumptions
about value of environment.)
(represented qualitatively by the red line)
Impact of low discount rate
• Amplifies the impacts of the decisions we
make today.
– Note: Even a 1% discount rate over 100 years
generally leads to the conclusion that what we
do today does not matter to the economy.
• Also brings attention to our poor explicit
valuation of the environment.
Stern Review: Criticisms
• Document is fundamentally political: An
advocacy document.
• Not up to the standards of academic
economic analysis
• Not based on empirical observations of the
economy
– Observed discount rates
– Observed behavior
Strengths of Stern Review
• Explicitly linked economic goals and
environmental goals
– Considered a major flaw of the Kyoto Protocol
• (Recall: Kyoto did include market mechanisms)
• Showed explicitly the necessity of having
the cost of carbon dioxide, the cost of
greenhouse gases, the valuation of the
environment in environmental policy.
Return to the interface with policy
Climate Science-Policy Relation
CLIMATE SCIENCE
UNCERTAINTY
PROMOTES / CONVERGENCE
OPPOSES / DIVERGENCE
KNOWLEDGE
POLICY
Economics-Policy Relation
ECONOMIC ANALYSIS
UNCERTAINTY
KNOWLEDGE
POLICY
PROMOTES / CONVERGENCE
Economic analysis is not the
compelling catalyst to converge the
development of policy – at least on
the global scale.
OPPOSES / DIVERGENCE
Different story on the local scale.
The economics argument
• Comes to the conclusion that we must
provide valuation to the environment, the
cost of energy, the disposal of our waste.
– Usually collapses to the argument of a market
versus a taxation problem.
– Economic efficiency.